sobering outlook for gold

derryb · February 22, 2008 2:34PM

Since there has been so much discussion here lately about precious metals (and an equal discussion about the discussion) thought those that have been blowing the PM horn might find this story sobering. What makes it so alarming is that is the concensus of many commodities analysts.
The Party's Over

anablep · February 22, 2008 2:37PM

I don't believe it.

Gold will hit $1000 before it drops significantly, if at all.

wayneme · February 22, 2008 2:46PM

I hate to put this like this
but the party is over on gold or anything when everyone knows about it
the so called experts have call gold everything but right !!!
the whole run what you saying now to me means hold on tight
jmpo

notwilight · February 22, 2008 2:47PM

Oh my. That is a very bullish article by some estimations. When they all climb onboard and say "buy", then the party will be over. --Jerry

wayneme · February 22, 2008 2:49PM

OK what he said

BlindedByEgo · February 22, 2008 3:05PM

<< Oh my. That is a very bullish article by some estimations. When they all climb onboard and say "buy", then the party will be over. --Jerry >>

This worked for me with real estate, and before with tech stocks. When the water cooler talk is all gold, all the time, sell into the strength.

OTOH, selling for dollars presently seems counterproductive. I understand that the next bubble is/will be equities in emerging markets. A good run through 2010.

PrivateCoinCollector · February 22, 2008 3:08PM

Must be true, I read it on the internet.

cladking · February 22, 2008 3:15PM

<< Oh my. That is a very bullish article by some estimations. When they all climb onboard and say "buy", then the party will be over. --Jerry >>

Indeed. Nobody likes gold. It has nearly quadrupled in price while attracting
very few proponents. Now that inflation will start getting talked about in the
mainstream press the bigger risk may be a buying panic.

I wasn't too much of a bull at $800 but I am at $925.

Yes, the risk is always greater after the price has increased but that just serves
to hold away the smart buyers as well as the bandwagon jumpers.

Sell when these same analysts are screaming that you have to buy to protect
your assest. When the last person jumps on board you'll want to have sold about
your last eagle. There won't be a lot of warning and it will come at the bleakest of
times when a few people start seeing a light at the end of the tunnel.

BECOKA · February 22, 2008 3:40PM

OK, I really hate to see articles like this that make predictions and have no real market data or indicators. i.e. Industrial use, mining, world trade issues etc...

They should state facts about what is going on and projections based on those facts before predicting a 15% decline in gold.

Phooey on Goldberg

oldcameoproofsguy · February 22, 2008 3:48PM

I hope the "analysts" are right and that gold does drop in price. Then I can buy more coins.

However, this article isn't so well written. What are the reasons for believing that most commodities are going to drop next year? This article doesn't even address the reasons. Why is the party over? The author doesn't even say why.

What a three paragraph diatribe based on nothing.

derryb · February 22, 2008 3:50PM

<< They should state facts about what is going on and projections based on those facts before predicting a 15% decline in gold. >>

That's the sobering part: These are commodity analysts being polled by Bloomberg. Not your run of the mill internet conspiracy theory!

mikebombs · February 22, 2008 4:29PM

BS!

Since G.W.B became president in Jan 2001 oil has gone up almost 500%.

From Wikipedia

<< from 2002-01-01 to 2008-01-01[38]:

In in US$, oil price rose from $20.37 to nearly $100, about 491% growth; >>

After oil hit $60, I was outraged. I was sure there would be a correction of at least $30. Thank god I didn’t short oil.

IMO gold is still undervalued atm. Don’t get me wrong, I have not bought bullion since gold was $300-350 and platinum $800-850 an ounce respectively. Cash is hard to come by in the last 2-3 years, so I have not been able to buy more. If I had the cash I would probably buy more gold and platinum today.

I plan to sit tight for this year. Even if there is a major correction, I doubt gold will fall anywhere close to my initial investments.

Konahead · February 22, 2008 5:14PM

time will tell, as the say in Vegas the only machine that hits 100% of the time is the ATM!

DoubleEagle59 · February 22, 2008 9:25PM

When they all climb onboard and say "buy", then the party will be over.

I agree with this, but this has not happened yet.

When my golfing buddies (who are not coin collectors) and my wife tell me to buy gold, THEN I will start thinking of selling.

Bullish · February 22, 2008 10:41PM

I'm still buying!! Most PM's are undervalued now. I'm not sure about platinum. I'm bullish on silver right now!! If it does go down, you don't lose much. It's also easy to get rid of. Do watch your gold more closely, as it can burn you.

fcloud · February 22, 2008 10:45PM

Don't worry, when the democrats get into office they will take our gold away to buy us health coverage, so the value is irrelevant because we won't have any.

Longshot · February 22, 2008 10:47PM

Nonsense.

Don't believe the bank charlatans, they will help you right over a cliff.

Do your own research and make investments based on fundamentals or these guys will bend you over a chair.

FLBuffaloHunter · February 22, 2008 10:51PM

The fundamentals that are causing the rise in PM's are still in place and in fact are only going to increse given the current policy of stabalizing the economy at the expense of devaluing the dollar and inflation. Until the dollar regains strength, PM will continue to rise. With the fiscal irresponsibilty that government has in place, that is not going to happen anytime soon.

roadrunner · February 22, 2008 10:53PM

Sobering outlook? This is shill journalism at its finest on behalf of TPTB and the major anti-gold players. What do you expect them to say?

And the major reason given in this "article" for gold and oil to fall
(as well as other commodities) is because they have gone up so much this year! Sparkling ANALysis.

Turning the commodities chart upside down is all the analysis presented. As Clara Pelter would say: "where's the beef?" Oddly, you never hear any analysts spouting similar things after years of the S&P or DOW rising. When those have gone up significantly in one year, they are only better buys right?

With gold we are in the 3rd to 5th inning of a ballgame. With banking credit and derivatives we are still in the 1st inning of getting to the bottom of it all. You tell me what's going to result from this unraveling. This party has only just started and very few guests have yet to arrive. And in case you missed it gold is not a 1 yr wonder. It's been going up since 2001 and we've been discussing it at length since early 2004. Frankly, the ones initiating new threads on the PM's recent activity are mostly ones who haven't contributed much if anything to the main 4 year thread. I'd rather read about the why than the mere fact that a metal is up or down today. The linked article is a waste of the reader's time.

roadrunner

tincup · February 22, 2008 10:57PM

<< OK, I really hate to see articles like this that make predictions and have no real market data or indicators. i.e. Industrial use, mining, world trade issues etc...

They should state facts about what is going on and projections based on those facts before predicting a 15% decline in gold.

Phooey on Goldberg >>

I totally agree. This article seems to treat the subject with the belief that they went up 'x' amount, and it is now time for them to come down. Without any considerations to what is going on in the world or the U.S., such as the plummeting dollar, the subprime problem, the lurking credit card fiasco, and so forth. And no details or basis for why they are predicting this.

-- Who are the so called 'Commodity Analysts'?

-- Where did this article originate (or, who wrote it?). We know that the Fed and the monetary reserve, etc., want to keep the price of gold down. Thus the report this last week that one of the European banks was going to sell 400? tones of it..... yeah, right. So is this article just another part of the attempt to try to keep the price down by having individuals get scared out?

-- And so if gold is no longer a good investment, what is a good investment, in their opinion? Be a good fella and put your money all back into the stock market?? Hmmm....

-- I'm not convinced by this article, and to me seems very vague with no rationale to it whatsoever. But then I've always liked gold and silver!!

tincup · February 22, 2008 11:00PM

<< 

<< They should state facts about what is going on and projections based on those facts before predicting a 15% decline in gold. >>

That's the sobering part: These are commodity analysts being polled by Bloomberg. Not your run of the mill internet conspiracy theory! >>

Not to me. They need to be more specific who these 'experts' are. Are they board members of the FED, or CitiCorp analyst?? It makes a big difference just who was asked. Why haven't we been hearing some of this from other true analysts in the field?

chiefbob · February 22, 2008 11:05PM

<< The fundamentals that are causing the rise in PM's are still in place and in fact are only going to increse given the current policy of stabalizing the economy at the expense of devaluing the dollar and inflation. Until the dollar regains strength, PM will continue to rise. With the fiscal irresponsibilty that government has in place, that is not going to happen anytime soon. >>

Our fiat currency has been so devalued, the Euro is replacing it. No wonder our gov't doesn't want a gold standard backing; they wouldn't be able to print more money than the gold on hand.

roadrunner · February 22, 2008 11:09PM

This article almost reads like the shillism that Jon Nadler (Kitco Analyst) posts each week over at Kitco. He's been wrong so many times in the past year that I'm surprised that he still has a job. But then again his job is to downplay gold moves for the COT. In that respect he's doing a great job talking down gold at every opportunity. You can bet that the Carlyle and Bilderberg groups have been hiding away gold for years all the while publically denouncing it. Do as they say, not as they do.

roadrunner

trozau · February 22, 2008 11:18PM

If and when it does decline to that level, I will consider it as just another buying opportunity. I would rather have my disposable income in PMs than in the bank or stocks. JMO

ElKevvo · February 22, 2008 11:23PM

Until the dollar regains strength, PM will continue to rise. With the fiscal irresponsibilty that government has in place, that is not going to happen anytime soon.

I agree with a couple of caveats...1) Gold, Platinum and Silver cannot continue to rise unabated forever....at one point the supply/demand relationship will change and prices will level out/fall. Due to the run up in price a lot more supply is coming on line...and sooner or later demand will drop due to the increased price. This happens with all commodities. 2) A portion of the $ increase can be attributed to speculators in the market. If a better opportunity comes along the speculators will pull out of their positions and the price will drop. 3) As can be seen with the last major run up in PM prices (Hunt Brothers era) the rise will be spectacular and the fall will be as fast. 4) There are always a lot of people who buy in at or near the top of a market and take a bath. But just like trips to Las Vegas, they never talk about how much they lost...you just hear about all the folks who are 'winning'. The casinos were built by the losers, not the winners. Once the PM situation gets whipped into a frenzy don't be afraid to take profits...even if you leave some money on the table. You never really know what the future holds.

I always try to keep things in perspective...there are folks who, for one reason or another, like to attempt to push/keep prices of something down for their own reason just as there are folks who hype something to get the price to rise so that they can cash out. Try to separate the wheat from the chafe, don't get greedy and you'll make out OK most of the time.

Anyway just felt like typing this morning....have a great day!

K

Edited for clarity...

53BKid · February 22, 2008 11:30PM

Other than central banks occasionally buying dollars to avoid an absolute free fall, there has been little effort to protect the dollar's value. Unlike Greenspan, who was a 'gold bug' who rarely acted in opposition to changes in gold prices, the current Federal Reserve chairman, Bernanke has lowered rates a few times despite gold's run up in price and devaluation of the dollar. Also the Bush administration sees nothing wrong with allowing market forces to prevail. Neither of these factors are apt to change significantly throughout 2008.

Whether technically or fundamentally, there's good support for gold moving considerably higher this year, particularly if inflation pricing continues to build. With each significant move higher more people are buying in. Meanwhile, this run up in prices has barely penetrated most investors' thought process. Just wait until it crosses $1000!

We have a long, long, long way to go in my opinion before gold breaks down completely, despite what the nay-sayers are touting.

planetsteve · February 22, 2008 11:35PM

Well, it really isn't an article, at least in the sense of it being a news story. It's a chart and a poll result. I have heard the gold prediction before (Kitco talking head on TV), but the rather moderate decline forseen for platinum -- only 10% -- was new and surprising to me. Since a substantial portion of platinum demand is dependent on jewelry, I had thought that prices could drop a lot more as demand gets quashed for rather discretionary purchasing. For that matter, there is practically no doom-and-gloom for silver.

The small-change hoarding set has been quiet lately, and apparently that isn't just because gold and platinum have risen so quickly -- nickel has dropped by a third and doesn't look to recover soon.

In any case, I guess we were all goofing around with coins when we should have been buying lead and wheat.

Edits: clarity

roadrunner · February 22, 2008 11:43PM

Gold, Platinum and Silver will continue to rise unabated as long as the currencies of the world continue to be debased at double digit rates. The supply/demand relationship is barely changing on Au, Ag, Platinum because there are so few new supplies coming to market.
Please show me all the new gold and platinum supplies coming to market based on the tripling and doubling of these metals (hint: there is none....the new gold "supplies" were coming out of central bank coffers for years). It's also possible that these metals will stabilize for good at their higher levels to lend some balance to the willingness of bankers to pump liquidity without constraints. It's clear that 30 years of printing money wildly and totally unbacked is a failed experiment resulting in the credit mess we currently see. Something has to be in place down the road to back paper currencies once again and the best choices are PM's. I don't see how we will start up again with another pure fiat experiment with no control on M1, M2 or M3.

I don't see speculation in gold, but merely real market mechanisms working to account for 25 years of "managed expectations" in the gold market. Once we get to $1500+ then you can start talking about speculation. Right now it's about catching up to 1982 inflation adjusted gold values. I don't expect a fast fall in the gold price this next time around. It will likely not fall back to under the $1000 to $1500 ever again once things stabilize out in the credit markets in the next 3-4 years. If anything, my estimates are probably on the low side as correcting markets rarely just make up for imbalances....they typically overshoot big time. Gold is fast becoming a pure currency once again - it has always had that potential even though Central Bankers have tried to brainwash the sheeple to think otherwise. Greenspan's actions clearly showed that his actions were anti-gold even though his core beliefs are different. The FED and PPT in concert acted many times to suppress the price of gold over the past 10 years.

Just my 2 cents.

roadrunner

tincup · February 23, 2008 12:09AM

It would not surprise me if the end result will be a 'new' currency..... possibly even one that will encompass the North American countries. (Oh no... not the Amero!! Put on your tin foil hats!!)

There is some speculation out there that the dollar free fall is being orchestrated, for a lead in to the possiblility of a 'new' currency. For those who think this is an absurd concept.... I have to ask, why are we different from any other country in the history of the world? It has happened at some time or other to ALL financial systems that I am aware of (but then I am not that much of a scholar in this area).

BUT if something like this would come to pass, then gold would be a great thing to have going in to it. If it does not happen, then gold is still a good thing to have as a store of value as long as the dollar suffers....

RedTiger · February 23, 2008 12:55AM

I would think that like Kitco, and a coin forum, commodity analysts have a vested interested in being bullish on commodities. Just as stock analysts favor the buy side 80% of the time. Interesting.

These analysts are well connected, well educated, and give informed opinions, but they are just that opinions. They can be wrong just like anyone else, especially as a group, especially at market turns. We'll see how this consensus turns out. Gold currently around $950 (2/22/2008), consensus prediction is $807 for one year out. Let's see how this pans out. Opinions, especially informed opinions are always welcome.

/edit to add: a one-year decline to gold $800 would not negate what I see as a long term bull market in gold.

Gemineye · February 23, 2008 1:17AM

<< Don't worry, when the democrats get into office they will take our gold away to buy us health coverage, so the value is irrelevant because we won't have any. >>

.....Oh no...!!!..not another bullion turned politcal thread.....!!!!

renman95 · February 23, 2008 3:00AM

roadrunner and tincup,

I must agree with you and would add the following: It's not speculation that the dollar is being orchestrated down. The actions by the Fed and Sec are obvious. The Euro-union is having a rough time trading with us and China, which is loosely linked to our dollar.

This year is the year of the perfect financial storm. I don't see PM's going down until many issues are resolved and that will not happen this election year and which may accelerate current problems. If I see Volcker-style interest rates coming then I would be concerned. It's a wait and see game. PM's will find a high base and then wait. Whatever the outcome, devaluation, change of currency or .... it wont be pretty.

Ren

Konahead · February 23, 2008 3:01AM

<< Nonsense.

Don't believe the bank charlatans, they will help you right over a cliff.

Do your own research and make investments based on fundamentals or these guys will bend you over a chair. >>

over a chair!

fc · February 23, 2008 3:05AM

anyone ever think that just maybe that these websites create articles
based on how many hits to their advertising banners it will generate? or to get page hits for their fancy uber website?

i know i consider it. very common technique in the IT world to create
speculative articles that every nerd has to read just so he can laugh
and debate the silliness but which gets termendous amount of traffic
to the website.

percyb · February 23, 2008 3:21AM

nothing like good scholarship and research to substantiate their assertions...jeezus

Coin Finder · February 23, 2008 3:29AM

It was written by a person working for the best interests of China in hopes the "rumor" will casue a panic and A lot of people will sell dropping the price so they can buy cheaper.

It will probably work....

unknowncomic · February 23, 2008 3:36AM

I couldn't find the Chicken Little icion so I will just say it. "THE SKY IS FALLING"
Every time some analist(yes I spelled it that way on purpose) starts crying about how bad things are, they get that bad .
Most of the time , things aren't terrible until the talking heads on the major networks talk us into a full blown panic.
If you own gold, silver , or ammo, hold your position if you dont need the money to eat or pay your mortage.
Just my opinion arrived at after 60 some years listening to "experts" tell me how to manage my life, marraige, kids, money.
Guess what ? They arent any smarter than I am. Do a little research and make your own mind up.
Ok . Off the soapbox now.

ChrisRx · February 23, 2008 3:43AM

<< I hope the "analysts" are right and that gold does drop in price. Then I can buy more coins. >>

You and me BOTH!

ProofCollection · February 23, 2008 3:49AM

To believe that gold is about to fall is to believe that the US dollar will start to strengthen. What is going to cause this? They keep printing money out of thin air, and the economy is flat or slowing. How is the dollar going to strengthen?

Short term, gold is going to $1000 and then some. Then it will languish and trade in a $200 range for most of the rest of the year, while it recharges for its next move up.

ChrisRx · February 23, 2008 3:55AM

interesting too

ARCO · February 23, 2008 3:55AM

Here is an article on Bloomberg about "peak oil". When oil costs rise, the inflationary pressures will be tremendous. The cost to extract, grow or transport commodities will only continue to rise. Add to that the emerging markets with their 2 billion newly wanting to enter the good life, and you can see that commodities have no where else to go but up.

Unless people can eat paper dollars for nourishment?

Bloomberg article.

Mercury10c · February 23, 2008 5:32AM

I agree, the party is over, or soon to be. Anyone that thinks that the price of anything will
just keep going up and up forever needs a smack upside the head. Remember tech stocks?
Remember real estate? Remember tulips? If you've made a bunch of money, lock in your
profits, then buy in again after the sell off.

trozau · February 23, 2008 6:16AM

oxy8890 · February 23, 2008 6:23AM

This is a very interesting read!

57loaded · February 23, 2008 7:10AM

<< I agree, the party is over, or soon to be. Anyone that thinks that the price of anything will
just keep going up and up forever needs a smack upside the head. Remember tech stocks?
Remember real estate? Remember tulips? If you've made a bunch of money, lock in your
profits, then buy in again after the sell off. >>

agree that it won't go on FOREVER but the ceiling is still above, especially for Ag and Au

the foundation that this current economy is/was built on is crumbling and until it hits the sill plates....it's still going up

Bear · February 23, 2008 7:11AM

"Even trees ,do not grow

to touch the sky."

eagle7 · February 23, 2008 7:13AM

This is the same old thought process that has been slopped to us by so called market experts since may of 2001 when gold was 255 an oz. Some lady on CNBC, an expert in commodities investing, was interviewed during may of 2001 about where the gold market would go. I was watching the very show when she said it would be at 125 an oz by years end and go down from there. Well, that was when it started rising and it hasnt stopped yet. Fortunately for me I paid absolutely no attention to what she said. I dont pay any attention to what the so called market experts say now. However, I agree with those who say that when their wife, or brother in law, or golfing buddies etc are suddenly wanting to buy gold, folks who could care less about it right now, well then it will be time to sell. Just my humble opinion.

roadrunner · February 23, 2008 7:16AM

nothing goes up forever

I'm going to have to put that one away in my key list of axioms.

Yeah, and I also remember reading an article about 3-4 years ago by a local bank president stating how derivatives have really taken the risk out of so many financial items. She basically said the system has never been more stable and primed for growth and success. What a load of %#$&

Well there are 7 things I can think of off the top of my head that go up or go on forever:

1. entropy
2. the national debt
3. total derivatives
4. taxes
5. MS70 SAE's
6. the universe
7. Cher

roadrunner

nutz4coinz · February 23, 2008 7:20AM

For every article you can find on the 'Doom and Gloom' of gold, or pork bellies, or FCOJ, you can find one that sings the praises of it. Watch CNBC, or some other financial channel (no, I am not a regular watcher of them, I just happen to catch them flipping through channels looking for cartoons)...thats why they have the host of the show in the middle, and those that say 'No' on one side and 'Yes' on the other. Hell, its simply an educated guess until ONE of them is proven right, then the one that was right can go 'Naaneenaaneenahnah'....its all bull.

ANYONE can make the numbers work for their particular stance. THAT is something we see every day. UNLESS you have insider info (which is strictly illegal), noone KNOWS whats going to happen, its just all guessing. A buddy of mine, who took a course on futures (not the crystal ball type of futures, but market futures, but it might as well have been the same...), told me 'Just look for the 3 peaks' (thats all I can remember about that shyte), and this poor guy is STILL busting his butt 40 hours a week, so he didnt get rich, nor did he make any money by listening to one of these 'guru's'. Just let the tail wag the dog, sell when you feel, buy when you feel. The VERY bottom line is..its YOUR money...are you going to let someone tell YOU what to do with it? I hope not.

Cant remember who said it but, "its never too high to buy, and never too low to sell"

HonoluluDude · February 23, 2008 4:03PM

"Analysts", LMAO. I've heard the "commodities bull is over" so many times over the last few years. When I don't hear it anymore is when I'll start thinking it's over.

HonoluluDude · February 23, 2008 4:06PM

I believe this commentary is more accurate.

sobering outlook for gold

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